A first mortgage is a home loan that is backed by the value of the home as collateral. It is called "first" because it would be in the first position to make a claim against the property should the borrower default.http://www.investorwords.com/1976/first_mortgage.html First mortgages usually offer lower interest rates than second mortgages because second mortgages cannot realize a claim on a property in default until the holder of the first mortgage is fully reimbursed.http://www.thetruthaboutmortgage.com/second-mortgages/
Mortgage Information : How to Refinance a First & Second Mortgage
This video talks about the process of refinancing a home with first and second mortgages on it and replacing them with one new first mortgage. The host of this clip explains that the fact you're paying off two mortgages instead of one doesn't add any complications to your refinancing process. The title company handles the details and the transaction operates the same way as if you were just replacing a single loan.
Fixed Rate vs. Variable Rate First Mortgages
When selecting a home loan, you'll be offered both fixed rate and variable rate mortgages. A fixed rate mortgage has an interest rate that remains constant throughout the term of the loan.http://www.thetruthaboutmortgage.com/fixed-rate-mortgage/ However, a variable rate or adjustable rate mortgage will have an interest rate that varies according to economic conditions. The beginning rate of an adjustable mortgage will be lower than a fixed rate mortgage, but it still carries more risk as the rate has the potential to rise in the coming months and years.http://www.thetruthaboutmortgage.com/adjustable-rate-mortgage/
Disclaimer
The content in this page is not a substitute for professional financial advice. Please contact a finance professional before using the information presented here.
References
Fast Facts
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Fact:
First mortgages almost always have lower interest rates than second mortgages
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Fact:
First mortgages are available both as fixed rate mortgages and variable rate mortgages
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Fact:
First mortgages exist as commercial mortgages as well as residential mortgages
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Fact:
First mortgages are available from mortgage brokers in addition to banks and lending institutions
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Fact:
When a second mortgage is in place, there will always be a first mortgage in front of it
